Real Estate Math
A South Dakota investment property with a purchase price of $600,000 and an NOI of $54,000 has what cap rate?
A7%
B8%
C9%✓ Correct
D10%
Explanation
Cap Rate = NOI ÷ Purchase Price = $54,000 ÷ $600,000 = 0.09 = 9%. Using the values given ($600,000, $54,000), apply the appropriate formula.. The correct answer is 9%.. This is a common calculation on the South Dakota real estate exam.
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